Thursday, April 25, 2019 at 5:03PM
After quite the decline in recent weeks, natural gas prices were finally able to put together a noteworthy upward move today, with May prices rallying over 2% on the day. The move came after being down initially in morning trading. In our morning report, we had warned of some upside risk in prices, with our sentiment being "slightly bullish" for the day. That worked out well, with the entire curve finishing the day with gains. Helping to spark today's rally appeared to be alleviating fears that today's EIA Report would show an injection around 100 bcf for the week ending 4/19/19. The number wound up coming in right at our estimate of 92 bcf. While still a much larger build compared to the 5-year average, it did not represent quite as weak of a supply / demand balance as the prior two weeks. We also have continued to see gains in forecast weather demand over the next couple of weeks, with our forecast running a little higher than normal demand levels, and much higher than demand levels on the same dates one year ago. At this time of year, weather isn't typically as much of a player in the natural gas world, but this setup is rather unique, with enough cold weather in the north for heating demand to be enhanced, but also some heat in the southern U.S. to enhance cooling demand, as shown in the GFS Ensemble projection for the 6-10 day period. Forecast high temperatures even this weekend are rather chilly for this time of the year from the Upper Midwest to New England. By the middle of next week, focus shifts quickly to the South, where we will see numerous high temperatures in the 85-90 degree range, definitely enough for folks to crank up the air-conditioning. What does all of this mean for natural gas prices over the next several days? Sign up for a 10-day free trial here to see what our latest research suggests.